The Nigerian Insurance Industry Reform Bill (NIIRA) 2025 recently signed into law by President Bola Ahmed Tinubu, which targets at driving financial sector transformation towards a $1 trillion economy has drawn key expectations for the sector.
Key focus of the Bill according to the Federal Government include – Stringent capital requirements to ensure the financial soundness of operators; Enforcement of compulsory insurance policies to enhance consumer protection; Digitisation of the insurance market to improve access and efficiency; Zero tolerance for delays in claims settlement; Creation of dedicated policyholder protection funds, especially in cases of insolvency; Expanded participation in regional insurance schemes, including the ECOWAS Brown Card System.
The National Insurance Commission (NAICOM), saddled with the mandate to administer and implement the provisions the Bill will be coming out with key pronouncements and timeframes in the days ahead. Such will focus on the following
Insurance Industry Recapitalisation:
In the days ahead, NAICOM would be expected to make a pronouncement on new capital requirement for the nation’s insurance industry, giving timelines and components of the capital.
It will be a landmark effort in implementing a capital requirement in the industry following failed attempts to introduce new capital in the sector, after the last recapitalisation exercise in 2007.
If the amounts earlier approved by the National Assembly Joint Committee before presidential assent still hold, insurance and reinsurance companies will be required to recapitalise as follows:
Life insurance, from N2 billion to N10 billion; Non-life insurance, from N3 billion to N15 billion; and Reinsurance Companies, from N10 billion to N35 billion.
Enforcement of Compulsory Insurances:
A major focus of NIIRA2025 is the plan to enforce different the compulsory insurance policies in Nigeria, targeting at consumer protection
The five compulsory insurances under the laws before the new Bill includes: Group Life Insurance in line with the Pension Reform Act 2004, as amended in 2014; Buildings Under Construction-Section 64 of the Insurance Act 2003; Occupiers Liability Insurance –Section 65 of the Insurance Act 2003; Motor Third Party Insurance –Section 68 of the Insurance Act 2003; and Health Care Professional Indemnity Insurance- Section 45 of the NHIS Act 1999
Mismanagement of Insurance Companies:
Another major challenge that had faced the insurance regulation was the lack of powers of the regulator, NAICOM to adequately enforce discipline and appropriately punish owners and managers of insurance firms that embezzle or mismanage Company funds. On several occasions, NAICOM failed to enforce such punishments; and culprits have had their way moving about freely, while policyholders and shareholders of such affected companies suffer the losses.
One key plank of the new Bill again, will be the creation of dedicated policyholder protection funds. This will help NAICOM to protect the interest of policyholders in the event of insurance an company going under, particularly life companies.
NIIRA will be expected to empower NAICOM to address these gaps with strengthened regulation for the insurance industry.
Nigerian Insurers Association on NIIRA 2025
The Nigerian Insurers Association (NIA) welcomes with great appreciation the presidential assent to the Nigerian Insurance Industry Reform Act (NIIRA) 2025, a pivotal legislation that sets the stage for transformative progress across the insurance ecosystem and the broader financial services landscape.
This Act represents a bold step toward strengthening the regulatory framework, enhancing public trust, improving market penetration, and modernizing operations within the industry. It reflects the Federal Government’s commitment to deepening financial inclusion and ensuring that insurance becomes a robust pillar in Nigeria’s economic architecture and in line with the president’s vision for achieving a $1 trillion economy by 2030.
As a leading voice of the industry, the Nigerian Insurers Association pledges its full support toward the successful implementation of the NIRRA Act. We are dedicated to facilitating sector-wide understanding and adoption of the Act’s provisions, engaging our member companies and stakeholders through capacity-building, advocacy, and technical support, partnering with regulators to ensure seamless execution and compliance and promoting innovation and inclusion, in line with the goals of the legislation
This is not just a legislative victory; it is a shared mission. NIA stands ready to champion a more resilient and customer-centric insurance sector that contributes meaningfully to national development.
NAICOM on NIIRA 2025:
NAICOM has described the new insurance law as the Dawn of a New Era, noting that it marks a significant milestone in the history of the industry and underscores this administration of Tinubu’s commitment to the financial sector’s reform and economic growth.
NIIRA 2025 is a game-changer for our industry, providing a modernized framework that will enhance insurance penetration, promote economic growth, protect policyholders’ interests and attract investments into the sector.
“We are confident that this new law will unlock the potential of the insurance sector, enabling it to contribute more meaningfully to Nigeria’s economic development and in achieving the $1 trillion dollar economy.”
NAICOM is confident that the new law will serve as a catalyst for growth, innovation, and enhance market confidence in the insurance sector, unlocking its full potential and significantly driving economic development. The Nigerian Insurance Industry Reform Act 2025 (NIIRA2025) represents a transformative milestone and a true game-changer for the nation’s insurance landscape.
NAICOM believes that the new law is a promising opportunity to transform the industry and will have a high positive impact on the contribution of the insurance sector to the country’s GDP and economy as a whole. With its focus on strengthening the industry’s regulatory framework, enhancing consumer protection, and promoting a more robust and effective industry, the Act is set to unlock the growth and potential of the insurance sector.
